Page 4 - Logistics News June 2019

Thought Leadership

Is demand planning

ready for AI?

Courtesy CSCMP’s Supply Chain Quarterly

Artifi cial intelligence could improve the accuracy of companies’ demand plans, but there
are several signifi cant hurdles that companies must overcome fi rst.

ARTIFICIAL INTELLIGENCE (AI) continues and it is repeated cycle after cycle. Given the
to draw a lot of attention as companies and nature of the activity, it is tempting to imagine
technology vendors look at how machine that a self-learning AI application could do
learning could improve supply chain operations. at least as good a job as a human planner at
In particular, demand planning – the process of forecasting demand.
developing forecasts that will drive operational A closer look, however, reveals that there
supply chain decisions – is being touted as are some serious challenges to AI successfully
the next potential fi eld for innovation. In fact, penetrating the demand planning market.
a recent survey by the Institute of Business
Forecasting and Planning (IBF) identifi ed AI as The need for data and digital savviness
the technology that will have the largest impact The most striking challenge that companies
on demand planning in the next seven years. face as they apply AI to demand planning is
It’s not hard to see the fi t between AI and the availability and accuracy of data. The more
demand planning. Demand planning involves data that is provided to an AI application, the
lots of number crunching and data analytics, more robust the resulting conclusions are,

2 June 2019 | Logistics News